By Andrew Mole, CEO & Co-Founder pubX
For a sector that should be helping to make the programmatic ecosystem run better, adtech has a nasty habit of undermining the publishers that provide its supply. Opaque supply chains shave off a significant share of ad revenues, while intermediaries scrape data to sell contextual segments against publishers’ will, and slow down the performance of websites with bloated tags.
With open web ad revenues on a razor’s edge, the adtech industry should be doing more to help digital publishers stand strong against economic and technological headwinds. But with the buy-side having deeper pockets than the sell-side, putting it in a position of power when it comes to inventory pricing, publishers can struggle to drive meaningful revenues. And if freely accessible, high-attention, and diverse websites can’t survive, the audiences that they cultivate will disappear with them.
If things don’t change, the democratic dream of the internet will come to an end, and digital advertising will have killed its golden goose. It’s vital that the industry commit more resources and investment towards ‘pubtech’ — technology developed exclusively for publisher interests – to ensure the open web isn’t killed off altogether.
Publishers face multiple pressures
Publishers face a battle on several fronts to preserve advertising revenues. Signal loss caused by spreading privacy regulations and growing consumer awareness has seen buyers lose confidence in the open web, shifting budgets to walled gardens such as Google, Facebook and Amazon as they seek to connect with their desired audiences.
At the same time, the ever-growing number of content choices and new platforms available to consumers means there is an ongoing tussle for attention. Made For Advertising (MFA) sites lure traffic and revenues away, meaning building and maintaining a loyal, engaged audience is a never-ending fight. Meanwhile, data shows that nearly half of publishers are struggling to recruit and retain talent, frustrating their efforts to continue to create quality content.
Technology is weighted in favour of advertisers
Another key battleground for publishers is technology. Currently advertisers have a wide choice of ad platforms they can use to buy inventory at a lower price. Demand-side platforms (DSPs) use algorithms to determine the value of every single bid, making use of rich data sets to pinpoint the exact bid amount to get the best deal for advertisers.
In contrast, tech tools for publishers are few and far between, and those that do exist are often very manual, or intimately entwined in the sale of media. Processes such as setting price floors for programmatic auctions aren’t usually automated but carried out by humans, who can’t compete by design with the efficiency of the adtech tools used on the buy side.
Overall, the level of conflict that exists in what should ideally be a symbiotic relationship between advertisers and publishers is having a deeply damaging effect. Some publishers argue that it isn’t an even playing field, with Google’s position in the adtech market a particular bone of contention, and are seeking to redress the balance in the courts. But the multiple legal actions faced by Google could take months – if not years – to resolve, and for now do little to alleviate publishers’ problems.
Why it’s vital to nurture the open web
The open web developed as a forum where information and ideas could be accessed and shared by everyone. But as time has passed, more and more territory that once was open web has turned into walled gardens operated by big tech platforms. Aside from having to deal with the spread of fake news and misinformation, these walled gardens are also becoming traffic hogs: social networks like Facebook and X are sending less and less referral traffic to quality news sources, causing concern for 63% of publishers, whilst Google’s Gemini brings more and more publisher content into its Search Results Pages, killing traffic altogether.
Traditional news publishers that operate on the open web are vital to the future of democracy. Access to quality journalism and other content from trustworthy publishers must be preserved; and for this to happen, it needs to be properly funded. But even publishers that amass large, loyal audiences can struggle to generate the revenues they need to be able to re-invest in producing quality content.
How technology can redress the balance
Ultimately, publishers are the most important part of the equation. Advertisers need premium inventory that provides a brand-safe environment for their ads to appear in, and without the engaged audiences of quality publishers operating on the open web they can’t have this.
But publishers are forced to compete in a real-time bidding market designed to favour advertisers. It’s clear that the industry needs to commit more resources to pubtech rather than adtech, so publishers have a fighting chance of competing equally and maximising the value of their inventory.
Building effective pubtech platforms is quite a challenge, though. Every publisher will have their own tech stack built in their own unique way – while all will use header bidding and connect to the same ad servers, the set-up will differ from publisher to publisher. While advertisers can easily tap into consolidated platforms that enable them to access inventory across a variety of formats and territories, the fragmentation on the publishers’ side means that plug-and-play solutions are much more difficult to construct.
Any pubtech tools have to be fully integrated into a publisher’s tech stack (both technical and human operations) and enable processes such as price flooring to be automated, based on real-world bidding data, if they are to have any utility when it comes to helping publishers realise the full worth of their inventory.
The future of the open web hangs on the health of publishers
Building a media ecosystem fit for the future can only be achieved if the industry throws its weight behind quality publishers. The emergence of distinct pubtech tools developed exclusively for publishers can play a big part in these efforts.
One of the biggest challenges will lie in standardisation. Publishing technology needs to be integrated and deployed in the same way that advertising technology is – quick and effective connections that enable publishers to see ROI immediately, rather than lengthy and high-cost implementations. It’s also important that the pubtech space doesn’t see the same levels of vapourware that have plagued adtech, with unscrupulous players promising the world but delivering little value to customers.
The open web is too important to lose. We can’t let it be killed off by walled gardens, but if we keep making it hard for publishers to make money then that’s exactly what will happen.
